The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $22.00 each with a minimum order of 400 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 50. Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $44.00 each. Hooper would pay the students a commission of $5.00 for each shirt sold Required: 1. To make the project worthwhile, Hooper would require a $14,450 profit for the first three months of the venture. What level of unit sales and dollar sales would be required to reach this target net operating income? (Do not round intermediate calculations.) Sales level in units sweatshirts Sales level in dollars 2. Assume that the venture is undertaken and an order is placed for 400 sweatshirts. What would be Hooper's break-even point in unit sales and in dollar sales? (Round your intermediate calculations and final answers to the nearest whole number.) Break even point in units Sweatshirts Break even point in sales dollars

Question

I had previously asked this question and there was no solution attached to it. I should be credited another question.

The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and
mascot of the local high school.
These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $22.00 each with a minimum
order of 400 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 50.
Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be
$44.00 each. Hooper would pay the students a commission of $5.00 for each shirt sold
Required:
1. To make the project worthwhile, Hooper would require a $14,450 profit for the first three months of the venture. What level of unit sales and dollar sales would be required to reach this target net operating income? (Do not
round intermediate calculations.)
Sales level in units
sweatshirts
Sales level in dollars
2. Assume that the venture is undertaken and an order is placed for 400 sweatshirts. What would be Hooper's break-even point in unit sales and in dollar sales? (Round your intermediate calculations and final answers to
the nearest whole number.)
Break even point in units
Sweatshirts
Break even point in sales dollars
Expand
Transcribed Image Text

The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $22.00 each with a minimum order of 400 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 50. Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $44.00 each. Hooper would pay the students a commission of $5.00 for each shirt sold Required: 1. To make the project worthwhile, Hooper would require a $14,450 profit for the first three months of the venture. What level of unit sales and dollar sales would be required to reach this target net operating income? (Do not round intermediate calculations.) Sales level in units sweatshirts Sales level in dollars 2. Assume that the venture is undertaken and an order is placed for 400 sweatshirts. What would be Hooper's break-even point in unit sales and in dollar sales? (Round your intermediate calculations and final answers to the nearest whole number.) Break even point in units Sweatshirts Break even point in sales dollars

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Other

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Identify the following expenditures as capital expenditures or revenue expenditures. Immediately af...

A: Expenditures: The useful life of the plant assets signifies the time period, that the company estima...

Q: Suppose your company sells goods for $450, of which $275 is received in cash and $175 is on account....

A: Journal entry: The record of business transactions in a chronological order in the journal using deb...

Q: Which of the following statements is correct? When depreciable property is gifted to another indivi...

A: Depreciation recapture: Depreciation recapture is a method used by ISR (Internal Revenue Service) th...

Q: Schlitterbahn Waterslide Company issued 35,000, 10-year, 8 percent, $100 bonds on January 1 at face ...

A: The journal entries can be made as follows :

Q: I need help solving this, thanks!

A: Break-even sales: Break-even sales is that level of sales at which there is no profit or no loss on ...

Q: Are the answers correct?

A: Variances are computed by subtracting the budgeted costs from actual costs. When actual rates/quanti...

Q: Gelb Company currently manufactures 40,000 units per year of a key component for its manufacturing p...

A: The decision to manufacture or buy needs to be taken on the basis of impact of cost changes arising ...

Q: The partnership of Avery and Kirk was formed on July 1, when George Avery and Dinah Kirk agreed to i...

A: Partnership: Partnership refers to the business run by two or more individuals based on some agreed ...

Q: Problem 13-9Cheyenne Company offers an MP3 download (seven-single medley) as a premium for every 5 c...

A: Workings:1 

Q: Early in the year Bill Sharnes and several friends organized a corporation called Sharnes Communicat...

A: Journal entries means writing down the transaction that takes place in a business, in the journal of...

Q: If I were to have accounts receivable in the millions and were $ 74 million at the beginning of year...

A: Accounts receivable turnover: This is the ratio which analyzes the number of times accounts receivab...

Q: Which of the following is not a “tax status” for an asset? Capital loss asset. Capital asset. Secti...

A: Capital Assets:All property that taxpayers own is capital asset, unless it falls into one of the fol...

Q: Exercise 9-16 The Blue Spruce Company is planning to purchase $496,800 of equipment with an estimat...

A: Payback period: Payback period is the anticipated time period which is required to recover the cost ...

Q: Work-in-Process Inventory, November 1 45,000 units Work-in-Process Inventory, November 30 23...

A: Units completed and transferred inventory:Units completed and transferred inventory represents the n...

Q: Problem 12-2Fields Laboratories holds a valuable patent (No. 758-6002-1A) on a precipitator that pre...

A: The balance on the given dates can be calculated as follows :

Q: The following expenditures relating to plant assets were made by Glenn Company during the first 2 mo...

A: Expenditures: The useful life of the plant assets signifies the time period, that the company estima...

Q: shown is the information needed to prepare a bank reconciliation for Warren Electric at December 31....

A: Bank Reconciliation Statement: Bank statement is prepared by bank. The company maintains its own rec...

Q: On May 1, 2020, Judice Company issued 400 $1,000 bonds at 104. Each bond was issued with two detacha...

A: Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lend...

Q: Crane Company’s direct materials budget shows total cost of direct materials purchases for April $30...

A: Cash budget meaningA cash budget is an estimation of the cash inflows and surges for a business over...

Q: I need help solving this problem. The picture attached is the information which was given. I copy an...

A: Income Statement: It includes the total cost incurred by the business and revenue earned by the busi...

Q: Problem 14-2 Concord Co. is building a new hockey arena at a cost of $2,620,000. It received a downp...

A: 1. Bond issue price= Present value of bonds redemption price + present value of interest annuities p...

Q: Problem 14-1The following amortization and interest schedule reflects the issuance of 10-year bonds ...

A: c) Determine the stated interest rate and the effective-interest rate:

Q: During Heaton Company’s first two years of operations, the company reported absorption costing net o...

A: Absorption Costing: Absorption costing identifies the cost that is absorbed while manufacturing and ...

Q: Hello, A task force of capital budgeting analysts at Morrison Ltd., collected the following data con...

A: The Net Present Value of the project has to be determined by deducting the present values of all inf...

Q: When analyzing financial statements, creditors are more concerned with which of the following? a. Li...

A: Financial statement analysis: The process of analyzing the financial statements of a company to asse...

Q: Gunflint adventures operate an airplane service that take fishing parties to a remote lake season la...

A: Determine the age of the airplane in months: 

Q: Required information Problem 14-44 (LO 14-2) The following information applies to the questions disp...

A: Calculating the value of total taxable income and federal income tax. We have,

Q: In which of the three activity categories of a statement of cash flows would each of the following i...

A: Cash flow statements are the statements that determines the inflow and outflow of cash from three ma...

Q: Montross Lumber processes wood to be shipped to construction companies. In order to keep its product...

A:  Inspection cost: The inspection cost is the cost incurred to examine the quality of the products. I...

Q: How to determine cash portion of retained earnings

A: Retained earnings are that part of profit which is reinvested in the business. It is the amount left...

Q: Exercise 8-5 Waterway Industries has accounts receivable of $98,600 at March 31, 2017. Credit terms...

A: Calculating the value of total estimated uncollectible. We have,

Q: Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose i...

A: Hey, since there are multiple sub-parts posted, we will answer first three sub-parts. If you want an...

Q: Shown below are comparative balance sheets for Sandhill Company. Sandhill CompanyComparative Bal...

A: Cash Flow Statements Cash flow statement provides information regarding cash generated or used durin...

Q: Flounder Windows manufactures and sells custom storm windows for three-season porches. Flounder also...

A: Revenue Recognition: As per the revenue recognition concept of accounting, the revenue of the busine...

Q: Brief Exercise 14-1 Flounder Corporation issues $560,000 of 8% bonds, due in 10 years, with interes...

A: Bond issue price  = Present value of interest component @ market rate  + Present Value of principal ...

Q: Estimating Costs in an Uncertain Environment  Many companies face increasingly unpredictable costs a...

A: When the business is facing uncertain business enviornment, the factors be it revenue or expenditure...

Q: Carmen had worked for Sparrow Corporation for thirty years when she died of a heart attack at age 60...

A: In favour of the first question regarding whether the payments made by Sparrow Corporation must be t...

Q: Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 D...

A: Incremental cost: Incremental cost refers to the cost incurred in producing an additional unit, in o...

Q: The following information is available for Sandhill Co. for three recent fiscal years.     2017 ...

A: Inventory turnover: This is the ratio which analyzes the number of times inventory is sold during th...

Q: 3) Operating income and tax rates for SALTCO’s first three years of operations were as follows: Inco...

A: It is to be noted that we have created deferred tax in 2017 at the enacted tax rate in 2017. However...

Q: The adjusted basis of an asset is the original cost (or basis) plus capital recoveries less capital ...

A: Adjusted basis: The amount of original cost, plus additional investments (capital expenditure) and r...

Q: Pearson Architectural Design uses a job-order costing system and applies studio overhead to jobs on ...

A: 1. Compute the predetermined overhead rate.

Q: If the offer is accepted with unused capacity, fixed costs will not increase. The amount of the sale...

A: The question can be solved as follows :

Q: Suppose your company sells services of $260 in exchange for $175 cash and $85 on account. Depreciati...

A: Journal entry: The record of business transactions in a chronological order in the journal using deb...

Q: Weighted-average costs per equivalent unit are $2 for direct materials and $3 for conversion. There ...

A: Cost of the goods completed:Cost of goods completed represents the total cost incurred for the mater...

Q: The Malaysian subsidiary of the PPC distributed and assembled electric motors. It also had limited m...

A: Computation of Investment:Initial Investment = Rs. 67.5 CrAdditional Investment = Rs. 30 Cr @ 10% p....

Q: Identy the type(s) of gain or loss that would be recognized on the following asset sales as capital,...

A: Capital gain relates to profits on the sale of investments or real estateSec 1231 gains is computed ...

Q: Early 2014, H industries was forms with authorization to issue 250,000 share of $10 par value common...

A: Stock holder’s equity: This section of the balance sheet shows the total balance in the stock holder...

Q: On January 1, 2019, Bailey Industries had shares outstanding as follows. 6% cumulative preference sh...

A: Click to see the answer

Q: The assets and liabilities of a company are $85,696 and $44,373, respectively. Stockholders' equity ...

A: Accounting equation:Accounting equation is an accounting tool expressed in the form of equation, by ...